ARMH Arm Holdings Plc ADS Each Representing 3 Ordinary Shares (MM)

LONDON—ARM Holdings PLC (ARM.LN), a computer-chip designer that creates technology found in Apple Inc.'s iPhones, Wednesday reported a rise in third-quarter revenue and profit, boosted by demand for a new chip used in smartphones and digital TVs.

The company, based in Cambridge, England, reported revenue of £ 243.1 million ($371.6 million) for the quarter ended Sept. 30, up from £ 195.5 million the previous year. Net profit rose to £ 85.9 million from £ 64.8 million.

Shares in the company were up 9% at 1,050 pence at 0746 GMT in London.

ARM said 3.6 billion of its chips were shipped during the period, up 20% from the same period the previous year.

The company said it expects group dollar revenue for the full year to be in line with market expectations.

Chief Executive Simon Segars said ARM has benefited from the growing use of a new chip that is used in smartphones, digital televisions and other products and that commands higher royalties than other chips. ARM chips are being used in an increasingly diverse range of devices, including energy efficient smartphones and computer servers, he said.

ARM receives royalty fees from every sale of a device containing its chips and from licensing its technology to its customers.

Numis analyst Nick James told The Wall Street Journal that while the overall results were broadly in line with expectations, investors were pleased by the strong 37% rise in royalty revenue, which had been an area of concern among some analysts, offsetting weaker licensing revenue. Analysts tend to focus on royalties because licensing revenue varies from quarter to quarter due to the timing of deals.

ARM's technology is used in 95% of smartphones, 80% of digital cameras, and 35% of all electronic devices, according to its website.

Write to Rory Gallivan at rory.gallivan@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 21, 2015 06:35 ET (10:35 GMT)

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